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News About Tech, Money and InnovationWed, 04 Mar 2015 00:43:35 +0000en-UShourly1http://wordpress.org/?v=4.1.1Copyright 2015, VentureBeatTech companies need to find a better way to work with European regulatorshttp://venturebeat.com/2015/01/25/will-2015-finally-bring-some-responsibility-to-tech/
http://venturebeat.com/2015/01/25/will-2015-finally-bring-some-responsibility-to-tech/#commentsMon, 26 Jan 2015 07:00:32 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1647406In 2014, European regulators sought to push back against many famous names from Silicon Valley. Will 2015 be any better?
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Tech companies can be categorized in two ways.

There are those whose principle objectives are based on finance and market share. While they may be selling technology developed in the 21st century, their ideological heritage is rooted in the 1980s – more Gordon Gekko than Jimmy Wales. These companies don’t take no for an answer, even from politicians. Silicon Valley can be so macho, right?

The second group is more “big society” than big business. These companies are driven as much by a desire to make things better as they are to make more money. And they understand that social returns and financial returns don’t have to be exclusive.

In reality, there are many companies in between. But for those interested in policymaking, this distinction has become more important over the last year. In 2014, European regulators sought to push back against many famous names from Silicon Valley. Should we have a view on which group is better? How should each be regulated?

London’s taxis

The taxi market in London is a key example of a culture clash between these two groups. The history of regulation in the London taxi market goes back to 1636. Following laws introduced by King Charles I (designed to reduce the use of hackney coaches in London for fear of congestion!) reform has been ad hoc. This all changed with the sudden arrival of smartphone apps, and the dramatic disruption that followed.

There are now many well-known brands operating in London. Some are focused on protecting and developing the black cab trade and playing by the rules; others seek to create new a market for minicabs and play by some of the rules; and some don’t even know what rules are.

Whatever your view on each, the frustration from drivers, passengers and campaigners is clear to see. Regulators have yet to win the confidence of almost everyone connected to the sector — and have failed to persuade almost anyone that there is a coherent plan to manage the many issues that are now confronting a vital part of London’s infrastructure. Tech is pulling the sector inside out, and fundamentally reshaping it, without passengers, and Londoners, having a say. Active engagement and thoughtful consultation is required.

This issue is not particular to transport in London. It is the elephant in the room of regulators working in a wide range of sectors and industries.

The taxi and private hire sector in London should be seen as a test bed for this issue.

Finding a solution before it’s too late

Policymakers should show leadership, work with the recent practical set of proposals made by Caroline Pidgeon AM and the London Assembly, and set out a clear timeframe for consultation, before leading to a dedicated ‘Taxi Bill’ in the next Parliament.

Crucially, the tech sector should be active participants in this process. Tech companies must be fully hardwired into the policymaking process — they should both listen and be listened to.

Finding a balance between innovation and established ways of working is far from easy. Not least when communities believe their heritage and history is being eroded; and when there are fundamental issues of safety and accessibility at risk. But it is an issue that policymakers and regulators must engage with now, before the market decides what is in its interest, rather than the public interest; and before today becomes a future none of us had a say in.

My own view is that new tech should not be used to torpedo long-standing ethical considerations, or, in some way, be exempt from commonly accepted values and standards. In the taxi sector, this is about safety, accessibility, transparency and community engagement. However the sector evolves in the future, should these not still form the backbone of the industry?

Tech should disrupt markets, not destroy values. Will 2015 be the year of responsibility in tech?

Chris Hall is a Senior Consultant at Aequitas Consulting – a strategic communications and political consultancy. He has previously worked as Head of Office for Simon Hughes MP, Minister of State for Justice and Civil Liberties.

]]>0Tech companies need to find a better way to work with European regulatorsUber’s asian competitors consolidate under SoftBankhttp://venturebeat.com/2014/12/10/ubers-asian-competitors-consolidate-under-softbank/
http://venturebeat.com/2014/12/10/ubers-asian-competitors-consolidate-under-softbank/#commentsThu, 11 Dec 2014 05:05:59 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1622423As Uber comes under fire both at home and abroad, Alibaba’s largest investor SoftBank has invested $250 million taxi app GrabTaxi, adding the Southeast Asian front runner to its investment family that already includes both China and India’s strongest taxi app competitors. The deal makes SoftBank the biggest investor in GrabTaxi, which now spans six […]
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As Uber comes under fire both at home and abroad, Alibaba’s largest investor SoftBank has invested $250 million taxi app GrabTaxi, adding the Southeast Asian front runner to its investment family that already includes both China and India’s strongest taxi app competitors.

The deal makes SoftBank the biggest investor in GrabTaxi, which now spans six countries in Southeast Asia including Singapore, Malaysia, Vietnam, Thailand, Indonesia and the Philippines. They currently claim to have 500,000 active users from 2.5 million downloads, though CEO and cofounder Anthony Tan told Technode his goal is to have a “few hundred million people use the app each day.”

SoftBank holds a 36.7 percent stake in Alibaba Group, making it their largest investor. In turn, Alibaba backs one of China’s taxi app front-runners, Kuaidi Dache, which boasts over 150 million riders in 350 cities.

Softbank’s taxi app investment family

Softbank’s investment family now includes three competitive taxi-apps covering an Asian market of over 3.2 billion people. Despite their recent US$1.2 billion investment round, this poses a formidable challenge to Uber’s globalisation plans.

GrabTaxi’s Anthony Tan says that loyalty was a big factor in their deal with SoftBank, led by CEO Masayoshi Son. Fourteen years ago Mr. Son invested $2 million in Jack Ma’s fledgling Alibaba, a stake now worth over 40 billion.

“You want guys like that because you want to win,” said Mr. Tan in an interview with Technode, “he [Son] is very clear in what he wants, and he’s very clear in who he wants.”

The company’s investment in multiple Asian taxi-app companies reflects the gradual consolidation of market players over the past two years. This is particularly true in China, where a previously large group of local competitors have now thinned to two brands, Alibaba’s Kuaidi Dache, and Tencent-backed Didi Dache.

“In China, there were like 30 [taxi apps], and now there are two,” says Mr. Tan. “That happened in just two years here. I think the world will move that way.”

Collecting local taxi-apps vs. Uber’s globalisation model in Asia

Uber has faced considerable roadblocks in their globalisation. Along with troubles back home and an official ban in New Delhi, Uber has experienced backlash in the Netherlands, Germany, Spain, Thailand and Toronto.

In a blog post this week, CEO Travis Kalanick said that the company has experienced “growing pains,” but that their recent $1.2 billion funding round will be used to “make substantial investments, particularly in the Asia Pacific region.”

One of the primary differences between Uber’s market entry and local starters such as GrabTaxi and Kuaidi is their relationship with local governments. According to GrabTaxi CEO Anthony Tan, the company not only works with local authorities in several countries for access to police records, they have also accepted funding directly from the Singapore government.

“Governments in Asia can decide overnight whether to crush you or not. It’s like that in China, and its like that in South East Asia. Governments have a disproportionate amount of power over business.”

Mr. Tan admits that the credibility of drivers will continue to be an issue, and that GrabTaxi is still consistently banning drivers from its fleet. But he says the cooperation with authorities has allowed them to get a head start over other competitors on important issues, including background checks.

“Our drivers are banned every day, whoever even flirts with a passenger is banned,” says Mr. Tan, who claims their work with authorities has prevented previous sex offenders from applying as drivers in the past.

Like GrabTaxi, Kuaidi has also carved out a competitive advantage by working closely with government regulators in China. India’s OlaCabs is an outlier in Softbank’s taxi app investment family in this aspect. This week they were swept up in Uber’s India ban on taxi apps. Even though both companies appear to still be operating, their future is murky considering the movement against taxi-apps is gaining international momentum.

“All Out War” for taxi app services in Asia

Despite issues with volatile Asian governments, Uber has still led a largely successful expansion 250 international cities and over 1,000 employees based overseas. Given the speed of their expansion over the past two years and their recent funding boost, they continue to be the dominant force globally.

“They’re [Uber] clear and we’re clear that it’s going to be an all out war,” says Mr. Tan, “but I think this dichotomy is often overplayed. For us it’s very clear, we need to stay humble and stay true to why we started this.”

The Singapore-based startup is planning on channeling SoftBank’s $250 million investment into new high-tech talent. Mr. Tan travelled to China this week with the aim of sourcing new high-tech staff and meeting with Chinese mentors, including Qunar and B series leaders GGV Capital.

]]>0Uber’s asian competitors consolidate under SoftBankThe best programming languages every beginner should learnhttp://venturebeat.com/2014/12/06/the-best-programming-languages-every-beginner-should-learn/
http://venturebeat.com/2014/12/06/the-best-programming-languages-every-beginner-should-learn/#commentsSat, 06 Dec 2014 23:00:32 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1620029There's always demand for sharp, talented engineers, which is why learning how to code can seem like an attractive option.
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Computer science is a booming industry in the US — and it pays extremely well. There’s always demand for sharp, talented engineers, which is why learning how to code can seem like an attractive option.

But, as is the case with any new skill, it can be difficult to know where to start. Here are a few steps you should take early on, and programming languages that are best-suited for beginners.

Start with ‘drag and drop’ programming.

“Drag and drop” programming is a basic technique that allows you to build code by dragging and dropping blocks or some other visual cue rather than manually writing text-based code.

It makes it easy to understand the basics of programming without getting caught up in meticulous character placement, according to Hadi Partovi, cofounder of a website that offers online coding courses called Code.org.

“Once you’ve learned the basic concepts using drag and drop, you’ll immediately want to learn [how to] do the real thing,” Partovi said to Business Insider.

Python as a starter languauge

Python is an easy language for beginners, according to Partovi, because there’s less of an emphasis on syntax. So, if you forget your parentheses or misplace a few semicolons, it shouldn’t trip you up as much as it might if you were coding in a different language.

Javascript is one of the most useful languages

Javascript isn’t as easy as Python, but it runs on every single platform out there — Mac, Windows, iOS, and Android among others. Every single Web browser, and even new types of devices like smartwatches use Javascript at some capacity, Partovi said.

After Javascript, try Ruby and Ruby on Rails.

Ruby on Rails is a great tool that can help you with the backend aspect of your programming. Although Ruby and Ruby on Rails have similar names, there’s actually an important difference. Ruby is a scripting language, just like Python, but Ruby on Rails is a Web app framework built on Ruby. In other words, Ruby is the language, while Ruby on Rails is a tool that makes it easy to use the Ruby language to build websites.

What makes Ruby and Ruby on Rails so attractive, according to Partovi, is that there’s very little prototyping involved. This means that once you have the code written, it’s pretty easy to get the final product up and running.

BONUS: Get familiar with HTML

While HTML isn’t a programming language in the sense that Python, Ruby, and Javascript are, you still need it to build a website. HTML is used to describe how your website looks, while other languages like Javascript power the interactive components, such as what happens when you click a button on the site.

]]>0The best programming languages every beginner should learnGoogle’s new ad strategy could delay a bunch of tech IPOshttp://venturebeat.com/2014/12/06/googles-new-ad-strategy-could-delay-a-bunch-of-tech-ipos-goog/
http://venturebeat.com/2014/12/06/googles-new-ad-strategy-could-delay-a-bunch-of-tech-ipos-goog/#commentsSat, 06 Dec 2014 21:00:00 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1620035There's the experience of Rocket Fuel, an ad network that went public in September 2013 . Months later, it was the subject of class action lawsuits, alleging the stock fell after it failed to disclose that many of its ads were being clicked by fraudulent botnets.
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Joe Apprendi, CEO of adtech startup Collective, is really enthusiastic about Google’s new interest in transparency in the online advertising business. He thinks that the buying and selling of ads online is going to go through a “complete reassessment” in the next couple of years as clients figure out just how much of their money is wasted or taken in online fraud.

And that, he told Business Insider during a break from a visit to Collective’s London office, could make a bunch of companies think twice about whether they want to file IPOs or not.

Earlier this week, Google disclosed that 56% of the ads appearing on its platforms aren’t actually seen by anyone. While that seems bad for Google — why would you want to run ads that don’t get seen? — Google is probably betting that by alerting its client base to the fact that it cares about non-functioning ads it will gain those clients’ trust in the future. Those “unviewable” ads are ads that are served on a page but not seen by the user, perhaps because they were low on the page and the reader didn’t scroll down that far. Currently, advertisers are paying for those ads even though no one sees them.

“Non-viewable ads will be worthless by this time next year,” Apprendi says. “They’re already technically worthless.”

Apprendi is betting that his company — which offers clients complete transparency about how their money is spent, the cost of the inventory bought, and the results they get — is well placed to gain clients that want to know whether consumers can actually see the ads they’re buying. Or whether bots are clicking on them.

But the industry’s switch from its current Wild West condition — Group M once offered clients pricing on a controversial “non-disclosed” basis — to one of full disclosure will be wrenching. Dirty laundry will be aired. Rocket Fuel will not likely be the last adtech company facing allegations from shareholders that it served lousy inventory. (And to be fair to Rocket Fuel, everyone is in the same boat here.)

That will have a knock-on effect in terms of the larger adtech companies considering going public. (You can see a list of them here.) “Do I want to be a public company while that happens? No,” Apprendi says. “A year ago [headlines about transparency were] not even top of mind. Now it’s a consideration.” (Another major issue: a bunch of adtech companies that did hold IPOs saw the value of their stocks sink in the months afterward.)

]]>0Google’s new ad strategy could delay a bunch of tech IPOsFacebook just gained a big ally in its battle with Ciscohttp://venturebeat.com/2014/12/04/facebook-just-gained-a-big-ally-in-its-battle-with-cisco/
http://venturebeat.com/2014/12/04/facebook-just-gained-a-big-ally-in-its-battle-with-cisco/#commentsFri, 05 Dec 2014 07:21:53 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1618402Gaming execs: Join 180 select leaders from King, Glu, Rovio, Unity, Facebook, and more to plan your path to global domination in 2015. GamesBeat Summit is invite-only -- apply here. Ticket prices increase on March 6 Pacific! Last summer, an organization led by Facebook fired a huge shot at Cisco. On Thursday, one of Cisco’s oldest rivals, Juniper, jumped in to back […]
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Last summer, an organization led by Facebook fired a huge shot at Cisco. On Thursday, one of Cisco’s oldest rivals, Juniper, jumped in to back Facebook in a big way.

And the threat to Cisco from Facebook went from huge to enormous. It won’t kill Cisco, but it will shake the trees a little bit and force Cisco to make some uncomfortable choices.

The shot was a new piece of networking equipment called the Wedge, which pushed Facebook into the $23 billion Ethernet switch market, currently dominated by Cisco.

This new switch wasn’t an actual product. It was a design for a new product, one that Facebook gives away for free through its Open Compute Project (OCP).

OCP is a radically new way to build and buy computer hardware. Anyone can contribute to the designs and use them for free, ordering them from a contract manufacturer.

Now, Juniper has done exactly that. It designed its own version of the OCP switch, which works with its operating system, Junos OS. It ordered this design from a contract manufacturer, Alpha Networks, and Juniper will sell this switch to enterprises with big data centers.

There are a few important things about all of this.

Facebook’s switch isn’t just a radically new way to buy a piece of hardware, it’s also part of a radically new way to design networks called software-defined networking (SDN).

SDN takes all the fancy features found in networking equipment and puts them into software that runs on servers. You still need the network equipment, but you need less of it and less expensive varieties. It will almost certainly cause a price war one day, if companies start to experiment with it and like it.

Facebook’s involvement with SDN will encourage them to do just that. If it works for Facebook, it could work for them.

The Wedge, and Juniper’s version of it (named the “OCX1100″), is designed to work with lots of open source software, too. People can program it with a common language like Python. It works with popular open source management tools from Chef and Puppet Labs.

All the network equipment makers are creating SDN switches, Cisco included. In fact Cisco says that its SDN product released last year is selling well.

But Cisco’s gear is not like the Wedge. Traditional switches from Cisco or Juniper are a single piece of equipment.

They look like this:

Above: Cisco Catlyst 6500 switch family. Credit: Cisco

The Wedge is designed to stitch together standard bits of hardware, that you can change as you see fit. It’s like Legos, only for a computer server, like so:

Above: Facebook Wedge switch. Credit: Facebook

Facebook has no interest in competing with Cisco. It just wants to build reliable, low-cost and easy-to-maintain equipment to use in its own data centers. OCP hardware saved Facebook over $1 billion in its first three years, CEO Mark Zuckerberg said. Many other companies want the same.

Most enterprises, even big telecom companies, don’t want to deal with designing and building their own Lego-like servers.

That’s where Juniper comes in. They can buy a Wedge from Juniper.

Cisco is well aware of the Wedge. In October, a few months after the Wedge launched, Cisco joined the OCP as a a Gold member. It told its customers that if they want OCP products, they can come to Cisco. They don’t need to go to Alpha Networks or Juniper.

Still, should Juniper’s OCP switch become popular, this should put Cisco in an uncomfortable position. Should it jump on the bandwagon, create its own Wedge, and put a knife in the back of its own SDN switch, which is selling well? Cisco has spent about $1 billion to create that product.

Or should it watch customers go to Juniper and its other competitors involved with OCP, like Arista?

Cisco had no comment on the Juniper switch, but did tell us, “Cisco has been a leader in advancing multiple open source programs, including the Open Compute Project.”

]]>0Facebook just gained a big ally in its battle with CiscoCarrier-neutral Internet data service 21Vianet raises $296M from Kingsoft, Xiaomi, and Temasekhttp://venturebeat.com/2014/12/04/carrier-neutral-internet-data-service-21vianet-raises-296m-from-kingsoft-xiaomi-and-temasek/
http://venturebeat.com/2014/12/04/carrier-neutral-internet-data-service-21vianet-raises-296m-from-kingsoft-xiaomi-and-temasek/#commentsFri, 05 Dec 2014 05:05:39 +0000http://venturebeat.com/?post_type=vb_syndicated&p=161782221Vianet Group, a leading carrier-neutral Internet data services provider in China, has announced that it has entered into share purchase agreements with Kingsoft, Xiaomi and Temasek. The three investors will inject a total of $296 million of funding into 21Vianet. Kingsoft agreed to a $172 million investment for a 11.6 percent stake in 21Vianet. Xiaomi […]
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21Vianet Group, a leading carrier-neutral Internet data services provider in China, has announced that it has entered into share purchase agreements with Kingsoft, Xiaomi and Temasek.

The three investors will inject a total of $296 million of funding into 21Vianet. Kingsoft agreed to a $172 million investment for a 11.6 percent stake in 21Vianet. Xiaomi invested $50 million into a 3.4 percent stake, while Temasek will invest $74 million for a 13.1 percent share of the company.

Following the deal, 21Vianet will build, operate, maintain and provide technical support for new, state-of-art data centers in China to meet the next-generation cloud infrastructure requirements of Kingsoft and designated third parties. Upon meeting certain conditions, 21Vianet will lease to Kingsoft and partners a minimum of 5,000 cabinets over the next three years.

Lei Jun, board chairman of both KingSoft and Xiaomi, disclosed that Kingsoft is going all-out in cloud services by investing $1 billion in the next three to five years.

He also announced that Xiaomi Cloud now has a storage capacity of 47 petabytes and provides service for almost 68 million users. The service has saved more than 24.1 billion pictures for users as of present, with daily growth for pictures at around 90 million and 1.2 million for video clips.

]]>0Carrier-neutral Internet data service 21Vianet raises $296M from Kingsoft, Xiaomi, and TemasekHydrogen fuel-cell vehicle tax credit expires this month: Will it be renewed?http://venturebeat.com/2014/12/03/hydrogen-fuel-cell-vehicle-tax-credit-expires-this-month-will-it-be-renewed/
http://venturebeat.com/2014/12/03/hydrogen-fuel-cell-vehicle-tax-credit-expires-this-month-will-it-be-renewed/#commentsThu, 04 Dec 2014 05:00:12 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1617440Financial and other incentives are widely viewed as a good way to kickstart the adoption of new green vehicles, largely to compensate for their higher prices against conventional gasoline cars.
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Financial and other incentives are widely viewed as a good way to kickstart the adoption of new green vehicles, largely to compensate for their higher prices against conventional gasoline cars.

But just as Toyota is building up to next fall’s launch of its 2016 Mirai hydrogen fuel-cell vehicle in the U.S. market, a key tax incentive will expire at the end of this month–unless it’s renewed by Congress.

The purchase of a plug-in electric car provides a Federal income-tax credit of $2,500 to $7,500 for the owner, depending on battery-pack size.

But the credits for hydrogen fuel-cell vehicles can be more generous yet–and are considerably more complicated.

That Federal income-tax credit expires on December 31, 2014–four weeks from today–and its renewal appears to be a very open question at this point.

With only a few days left in the current lame-duck Congressional session, and major issues (like funding the government and for how long) as yet unresolved, the fundamental challenge is getting a so-called “extender package” passed.

To do that, the Senate’s desire for a two-year package produced by its Finance Committee must be reconciled with the House’s desire to make selected tax and legislative changes permanent.

Meanwhile, President Barack Obama’s immigration initiative is expected to eat up a lot of time.

The Senate Finance Committee’s draft legislative bill for an extender package included a provision that extends the hydrogen fuel-cell vehicle income-tax credit.

That committee is expected to be chaired by Senator Orrin Hatch [R-UT] in the next Congress; its outgoing chair is Senator Ron Wyden [D-OR].

Whether an extender package can be passed by the outgoing Congress, or early in the next session by the new Congress, remains very much an open question, according to D.C. insiders we spoke to.

“If they don’t [pass such a package],” said one source, “who knows what will happen in 2015?”

Meanwhile, the Federal income-tax credits for purchase of plug-in electric cars do not have an expiration date. Instead, they are capped by volume for each automaker.

“The credit begins to phase out for a manufacturer’s vehicles when at least 200,000 qualifying vehicles have been sold for use in the United States,” says the IRS website, “determined on a cumulative basis for sales after December 31, 2009.”

]]>0Hydrogen fuel-cell vehicle tax credit expires this month: Will it be renewed?Google is now officially beating Apple in the TV streaming markethttp://venturebeat.com/2014/12/03/google-is-now-officially-beating-apple-in-the-tv-streaming-market/
http://venturebeat.com/2014/12/03/google-is-now-officially-beating-apple-in-the-tv-streaming-market/#commentsThu, 04 Dec 2014 03:00:51 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1617428Roku and Apple dominated the TV streaming market last year, but now Google’s Chromecast has pulled ahead of Apple to become a front-runner. Research firm Parks Associates just released some new data on the most dominant brands when it comes to set-top boxes and streaming sticks (via 9to5Google). Roku is still in the lead since […]
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Roku and Apple dominated the TV streaming market last year, but now Google’s Chromecast has pulled ahead of Apple to become a front-runner.

Roku is still in the lead since it made up 29% of streaming set-top box sales in the first three quarters of 2014, but Google’s Chromecast came in second with 20% of the market.

This pushed Apple back to third place with 17% of the streaming TV market. Amazon landed in fourth place with its new Fire TV, which captures 10% of the market.

Google’s Chromecast streaming stick is much cheaper than competing devices, which could be part of the reason it’s become so popular over the past several months. But, since it’s less expensive, its functionality is also more limited.

The $35 Chromecast is a small USB stick that plugs into the HDMI port on your TV. It’s currently on sale for $23 via Amazon. Apple TV and Amazon’s Fire TV, by comparison, both cost $90, while the Roku Stick costs $50 and the Roku 3 costs $99.

The Chromecast connects to your iPhone, Android phone, iPad, Android tablet, or laptop (Windows or Mac), and lets you “cast” apps to your TV. It works with popular services such as YouTube, Netflix, HBO GO, and Hulu Plus among others. You can also mirror content from your Android device or Chrome browser directly to your TV.

The main difference between the Chromecast and its competitors is that you need a separate device to watch content and run apps, while other offerings from Amazon, Roku, and Apple don’t. Still, if you want to watch Netflix or Hulu on your TV but don’t want to invest more than $50 in a streaming device, the Chromecast seems like it can get the job done well.

]]>0Google is now officially beating Apple in the TV streaming marketBitcoin moves from hype to disappointment, and on to real utilityhttp://venturebeat.com/2014/12/01/bitcoin-broken-down-is-it-a-bubble/
http://venturebeat.com/2014/12/01/bitcoin-broken-down-is-it-a-bubble/#commentsTue, 02 Dec 2014 05:04:06 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1615966Even many sophisticated early tech adopters are scratching their heads unless they have a really compelling personal reason to start adopting Bitcoin. Still, I believe that Bitcoin is going to be one of the most dynamic areas in tech over the coming five years.
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Updated December 3 at 9:45 a.m. ET to reflect that Blockstream is based in Canada, not the U.S.

If you hang around the tech scene for long enough you will see some absolutely amazing ideas being turned into businesses.

Some arrive too early to be successful, some aren’t executed successfully and some are just so ‘out there’ that the public at large can’t get their head around the idea, no matter how good it is.

Bitcoin (and cryptocurrencies generally) is in that last category right now.

The potential for this area is huge. But currently, even many sophisticated early tech adopters are scratching their heads unless they have a really compelling personal reason to start adopting Bitcoin (like buying large quantities of drugs on the dark web or moving vast sums offshore from China…).

The nuts and bolts

Still, I believe that Bitcoin is going to be one of the most dynamic areas in tech over the coming five years. Before I explain why, it’s worth going over some of the ‘nuts and bolts’ of the technology.

Bitcoin is a software-based online payment system that has been building momentum since 2008.

It is open-source software, which means that it promotes free access to anyone that wants it. Bitcoin is the native currency of the public ledger for the system. All payments are recorded on this ledger, which is called the block chain.

There is no central administrator for the system. This is important: Currencies are generally administered by governmental authorities. And so governments around the world really don’t quite know what to do with Bitcoin (which is currently the largest cryptocurrency/digital currency).

However, Citi’s chief economist argued in a recent research paper that gold is a commodity like bitcoin and other cryptocurrencies — and I agree.

Most people will obtain Bitcoins by swapping them for cash or other products/services.

Many of the business models that are emerging around Bitcoin relate to wallet or storage technologies. Just like cash, people want to know that they can store it safely and transfer it both securely and cost effectively.

Bitcoin is still some way off the mass market though, and a combination of huge speculation along with very large demand spikes (particularly in Asia, as money gets moved offshore) has meant that the price has been very volatile.

The hype and the reality of Bitcoin

Since I have been watching Bitcoin, it charged up from $90 per Bitcoin to $1,000, but then collapsed. It’s now bumping along around $360-380.

A steady price and an increasing amount of use cases means that more people will begin to look at using Bitcoin.

The main benefits are that payments with Bitcoin are private, fast, and cheap. Clearly payments being made in secret are a concern to law enforcement agencies around the world, but there are a lot of investors and companies out there that want to keep their (quite legal) business activities out of the limelight.

There’s been a lot of hype around the $21 million seed round in Blockstream, a high profile Canadian company invested in by the tech glitterati which is focusing on the platform around Bitcoin (block chain and side-chains off the main block chain).

But London is growing a really healthy digital currency ecosystem. The U.K. Digital Currency Association is doing a great job at pulling the ecosystem together, and well done to the guys at Elliptic for raising £2 million. There’s no doubt that we will see a lot more London-headquartered companies in this space taking on serious investment over the next few years.

A corporate partner, Richard Goold heads the US desk and co-chairs the firm-wide tech sector group at Wragge Lawrence Graham & Co. He spends his working life leading complex corporate transactions, generally in the tech sector and usually across borders. To accompany his insights in Fintech Monthy, he will be writing a monthly column on the biggest trends in fintech.

]]>0Bitcoin moves from hype to disappointment, and on to real utilityThis 24-year-old high school dropout is tackling a problem every startup hateshttp://venturebeat.com/2014/11/29/this-24-year-old-high-school-dropout-is-tackling-a-problem-every-startup-hates-to-deal-with/
http://venturebeat.com/2014/11/29/this-24-year-old-high-school-dropout-is-tackling-a-problem-every-startup-hates-to-deal-with/#commentsSat, 29 Nov 2014 17:45:48 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1614816Jessica Mah, the founder and CEO of Indinero, was only 11 years old when she started her first business. Having learned how to code in fifth grade, Mah built websites for people and got paid a few thousand dollars a month.
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Jessica Mah, the founder and CEO of Indinero, was only 11 years old when she started her first business. Having learned how to code in fifth grade, Mah built websites for people and got paid a few thousand dollars a month.

That experience led her to do something more serious for her next business. She leased servers out of a few data centers and created a fully managed hosting service for small businesses, which she describes as a “cheaper version of Rackspace.” She had about four part time employees and generated six-figure revenues from it.

Although she had sales, Mah struggled to deal with cash flow and her server business eventually closed when she was 14 years old. By then, she was spending 40 hours a week on her business, and school was no longer a priority. Her grades were terrible and she ended up dropping out of high school.

“I was so stressed out,” Mah told Business Insider. “I remember thinking I was never going to start my own company and would never go into technology.”

But Mah was still smart enough to get into Simon’s Rock, an “early college” designed for students who want to get college education before graduating high school. It took her two years there to realize computer science was the only major she was happy with, and so, at age 17, she applied to UC Berkeley’s computer science program. After another two years, at 19, Mah graduated from UC Berkeley’s CS program.

Her time at Berkeley also brought back something she had been missing for a few years: her entrepreneurial drive. From her past experience running small businesses, Mah knew how the current accounting software were outdated. She knew accounting was an area ripe for innovation, but none of her fellow computer scientists were interested in the space because most of them had never dealt with it before. So by graduation, she created an accounting software called Indinero with her friend. “I wished there was some service like the ‘Google of accounting for small businesses,’” Mah says.

And the day after graduation, with a prototype, she headed down to Mountain View to join Y Combinator’s summer program. After 3 months, Mah raised $1.2 million for the seed round of Indinero. She was only 20 years old.

Indinero is a software that provides accounting, tax filing, and payroll management all under one service. It basically takes care of all the back office work by automatically importing data from the business owner’s financial accounts. It also has full-time professional accountants and tax specialists manually reviewing financial statements to make sure all the books are in order. “We just make it a lot more cost-effective and affordable because you have all these software layers doing so much of the work,” Mah says.

Indinero has been growing quite fast and now has 75 employees. It’s raised $8 million from angel investors, including 500 Startups’ Dave McClure, Yelp’s Jeremy Stoppelman, and Khosla Venture’s Keith Robois. Mah says over 500 companies use Indinero, including small businesses and bigger ones like some PR firms and law firms.

Despite all this success, Mah, now 24, says running a company has been a big challenge for her. “It’s my first company that’s doing millions in revenues, my first company that has full-time employees and a full office…So it’s been pretty difficult,” Mah says. But she still thinks it’s all worth the struggle. “It’s challenging at times. But it’s an incredibly rewarding job.”

]]>0This 24-year-old high school dropout is tackling a problem every startup hatesApple Pay competitor ‘Android Pay’ is reportedly coming to Chinahttp://venturebeat.com/2014/11/26/apple-pay-competitor-android-pay-is-reportedly-coming-to-china/
http://venturebeat.com/2014/11/26/apple-pay-competitor-android-pay-is-reportedly-coming-to-china/#commentsThu, 27 Nov 2014 03:00:36 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1614405According to a new report from China Business News, a new mobile payments service called Android Pay is coming, and will likely launch in the third quarter of 2015.
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It looks like Apple Pay will soon face some competition in the mobile payments space from its biggest competitor, Android.

According to a new report from China Business News, a new mobile payments service called Android Pay is coming, and will likely launch in the third quarter of 2015.

Android Pay is reportedly being developed by China UnionPay, which is the biggest credit and debit card provider in China. For context, UnionPay is the second biggest payment network in the world next to Visa, based on the value of processed transactions.

According to Want China Times, UnionPay has already approached smartphone makers including Lenovo and Coolpad. UnionPay is likely to offer subsidies to smartphone makers to ensure popular smartphones will include the technology required for Android Pay to work.

Android Pay will be similar to Apple Pay and will utilize Near Field Communication (NFC) payments with Android smartphones, which will allow for wireless payments.

Apple recently announced the ability for Chinese Apple users to make payments using UnionPay’s credit cards in its App Store, a collaboration that suggests Apple could work with UnionPay to bring Apple Pay to China.

There’s no reason why UnionPay couldn’t introduce Android Pay while also supporting Apple Pay in the future, but for now it appears that Chinese smartphone users won’t have to wait too long to be able to purchase things at the store with a swipe of their phone.

Update December 5: A previous version of this article contained an incorrect investment amount from Found Fair, which contributed €200,000.

While Uber and taxi companies are fighting over different regulations in court in pretty much every city out there, Berlin-based T Dispatch found a solution that could solve part of the problem — and quietly raised €1 million.

The problem taxi companies face with Uber is not only the price and the new competition, but also the technology. While Uber operates through a simple app, taxi companies receive calls and requests through their own websites and have a hard time organizing fleets, as they do not know if a driver is available or who might be booked with other services such as mytaxi. Also, cab drivers pay up to 15 percent of their fare price when accepting a mytaxi request.

Like Uber for taxis

While Uber and mytaxi have one brand and one system, T Dispatch connects the local transport fleets (including taxis, limousines, and, in the future, also food-delivery services) and on-demand services.

T Dispatch is a software-as-a-service application that connects and organizes taxi and minicab fleets in its content-management system. On one hand, it collects all requests for one taxi fleet. It also offers a white-label tool for cabs to use. Besides the customer-relationship management software and an app, T Dispatch offers route navigation and document sharing, while requiring no extra hardware other than an iPhone or Android device.

Besides that, T Dispatch also offers airports or railway companies, such as Abellio (U.K.), ways to let customers book a taxi right over the middleman’s platform.

Getting started

Having launched two years ago, the team behind T Dispatch, including founders CEO Bryony Cooper and CTO Mario Brandão, has grown to include 17 people. In November, the team moved into new office space at Hackische Höfe next to startups such as HelloFresh, Hitfox, and betterpay.

Pitching at Seedcamp in Berlin, they found their first angel in the audience. Found Fair invested €200,000 and provided office space. T Dispatch later raised €500,000 from HTGF as well as another half-million euros from angel investors such as Martin Sinner (Idealo), Christian Vollman (eDarling, Research Gate), and Win.Rar. The investment was mostly used to develop the backend software, T Dispatch explained.

The business model

Cab companies can pick and switch between two models: €0.79 per booking with a minimum of 200 bookings or a monthly €18 per-driver fee.

In countries like India, Australia, France, Switzerland, or Congo, T Dispatch is already in use, but its priority is to launch in English-speaking countries first.

Seeing a clear demand for the service in England, London was the first market it entered.

London alone has 9,000 minicab companies, with most having two to ten drivers, according to T Dispatch. In Germany, that is different: Large cities have a very small number of cab companies. However, they have much larger fleets.

“There have been several articles recently implying that Tesla, through clever machinations, maneuvered Nevada into providing an overly large incentive package for the Gigafactory,” said Musk. “I love backhanded compliments as much as the next person, but this is untrue.”

Musk was presumably referring to an investigative report in Fortune that detailed how several states competed to build the factory by offering various incentives.

Musk noted that the state incentives for Tesla’s factory were approved unanimously by Nevada’s legislature.

“The deal is not merely slightly good for the people of Nevada, it is extremely good,” said Musk.

The Tesla CEO denied receiving any cash from the state, but did acknowledge that his company had recieved a parcel of land from the deal.

“If you have been to Nevada, you will notice that there is quite a lot of extra land with nobody on it,” he said. “This is not in short supply.”

Musk said Nevada’s contributions would only cover a small portion of the Gigafactory’s cost.

“Of the $5 billion investment needed to bring the Gigafactory to full production in five years, state incentives will cover about 5%,” he said.

That would value Nevada’s contribution at about $250 million. The Fortune article said the “tally” for Nevada was $1.4 billion.

Musk also revealed that Nevada didn’t write Tesla a blank check, so to speak.

“All of the incentives approved by the legislature are performance based,” he said. “We must execute according to plan to receive them, meaning that, while the state and Tesla both share the upside, only Tesla suffers the downside.”

Tesla has huge plans for this enormous facility in Nevada, and the company is making some major “forward-looking” claims about what it will be able to do.

Tesla put together a pdf with its future plans for the facility, claiming some major figures by 2020, including a vehicle volume of around half a million per year.

The company also provided this telling chart of where it thinks it will be in relationship to the competition. It says that “The Gigafactory is designed to reduce cell costs much faster than the status quo and, by 2020, produce more lithium ion batteries annually than were produced worldwide in 2013.”

There have been several articles recently implying that Tesla, through clever machinations, maneuvered Nevada into providing an overly large incentive package for the Gigafactory. I love backhanded compliments as much as the next person, but this is untrue.

Nevada is the entertainment capital of the world, home to the most sophisticated casinos on Earth. As everyone knows, the money to build those resorts arises because the casino houses generally tend notto lose. Even were they to lose, the state of Nevada, through the taxes it collects, would still win – it is the house to the house. They really know what they are doing.

Moreover, when the incentive proposal went to the Nevada legislature, it received approval from every member of the Senate and House with no dissenting votes. This includes every Republican and Democrat representative from every part of the state. Following passage of the bill, the debt ratings agency Moody’s assessed the deal as credit positive for both the Reno area and Nevada as a whole.

The reason is that it is a no-lose proposition for the state. The deal is not merely slightly good for the people of Nevada, it is extremely good.

To understand why, one must look closely at the terms of the deal. A casual reader of stories about the Gigafactory might assume that the $1.3 billion number in the headlines means that the state wrote Tesla a huge check for that amount. In fact, Tesla has received no money from the state at all. We did receive land through a swap the state did with our developer, but, if you have been to Nevada, you will notice that there is quite a lot of extra land with nobody on it. This is not in short supply.

Of the $5 billion investment needed to bring the Gigafactory to full production in five years, state incentives will cover about 5%. Compared to the operational and upgrade costs over a 20 year period, expected to be approximately $100 billion, state incentives will constitute just over 1%. This makes sense: the $1.3 billion in incentives mostly consists of alleviating a few percent of annual property and use tax on a huge amount of equipment over the course of 20 years, an average of about $50 million per year after initial construction.

However, the 20 year mark is simply when the last of the incentives expires. The Gigafactory itself will continue contributing economically to Nevada for much longer. Our automotive plant in California has been in operation for over 60 years with no foreseeable end in sight.

It stands to reason that the beneficiaries of a project should also contribute to its creation. Given that Nevada will have the largest and most advanced battery factory in the world and a very large number of high-paying direct and indirect jobs, contributing about 5% to the initial construction cost and a few percent to costs thereafter seems pretty fair.

Finally, with the exception of the land conveyance, all of the incentives approved by the legislature are performance based. We must execute according to plan to receive them, meaning that, while the state and Tesla both share the upside, only Tesla suffers the downside.

At Tesla, we believe in doing deals where both parties benefit, and, when there is an asymmetry or underperformance on our part, interpreting that in the other party’s favor. This is true for big deals like the Gigafactory and for everyday transactions. For example, if you buy or lease our car and don’t like it (within a reasonable amount of time), you can automatically give it back, accounting only for usage and damage. Tesla will absorb loss of the new car premium when reselling it as a used vehicle.

Our goal in doing so is to build long-term trust. If people know that we will not take advantage of them and aspire to fairness, even at our own expense, then they are much more likely to want to work with us in the future.

The article below about our vehicle factory in California gives a sense of what we expect of the Gigafactory in Nevada.

]]>0Elon Musk: We didn’t trick Nevada into taking our GigafactoryNew details on the sequel to the OnePlus One — one of the hottest Android phones of the yearhttp://venturebeat.com/2014/11/23/here-are-some-new-details-on-the-sequel-to-the-hottest-android-phone-of-the-year/
http://venturebeat.com/2014/11/23/here-are-some-new-details-on-the-sequel-to-the-hottest-android-phone-of-the-year/#commentsSun, 23 Nov 2014 23:30:54 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1612481OnePlus, the Chinese tech startup that created the super hard-to-find OnePlus One, is already planning to launch a new phone next year.
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A source familiar with the situation told Business Insider the following about OnePlus’ next phone:

It will probably be more customizable, since the company is aiming to produce more of its StyleSwap back covers around the time the phone launches, our source said. OnePlus released a Bamboo-style back cover for its One phone, but discontinued it in September due to manufacturing issues. OnePlus sold a few of those covers earlier this month, but since they were so limited you need an invitation to buy them. The company previously said it would release its StyleSwap backs in different materials such as wood, denim, and Kevlar, but we have yet to see any of these launch. There’s no guarantee manufacturing issues won’t arise this time around, but based on what our source says it sounds like the company is trying to produce more to coincide with the phone’s launch.

The next OnePlus phone will likely still be cheaper than other off-contract Android phones. We’re hearing that the phone will likely cost less than $500 even if there are significant hardware improvements since OnePlus wants to keep its margins thin.

There will be some “surprises in store when it comes to hardware.” We have no idea what this means, but our source wouldn’t elaborate any further.

OnePlus launched its One smartphone in April, and it turned out to be one of the most highly regarded phones of 2014 by both reviewers and consumers. There are two main reasons everyone’s been talking about the OnePlus One: it’s super cheap and extremely hard to find.

The OnePlus One costs $350 off contract, which is a pretty unheard of price. Without a carrier subsidy, phones like the Galaxy S5 usually cost around $600 off contract. With its OnePlus One, the company was able to include some of the best components, an attractive design, and a bright, sharp screen for about half the price of your standard Android flagship.

Since demand has been so high, you can only order the One if you have an invite from someone who already owns the phone. OnePlus also rolls out preorders to the general public in limited time blocks, and the most recent one took place on Nov. 17.

]]>0New details on the sequel to the OnePlus One — one of the hottest Android phones of the yearIs Jaguar planning an electric sports car? We can hopehttp://venturebeat.com/2014/11/23/is-jaguar-planning-an-electric-sports-car-we-can-hope/
http://venturebeat.com/2014/11/23/is-jaguar-planning-an-electric-sports-car-we-can-hope/#commentsSun, 23 Nov 2014 19:00:05 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1609238The fact that Jaguar recently trademarked the name "EV-Type" brings up some interesting possibilities.
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Carmakers do their best to keep future-model plans a secret, but the sprawling bureaucracy of today’s corporate operations can sometimes make that difficult.

A part of that work involves protecting intellectual property for potential new models and technologies that may not even be confirmed for production.

The fact that Jaguar recently trademarked the name “EV-Type” brings up some interesting possibilities.

The registration was filed with the U.S. Patent and Trademark Office on October 30 — and also with a similar registry in Europe — for use on “motor land vehicles” and other applications, Motor Authority reports.

Jaguar hasn’t confirmed any plans for an electric car, but the use of the “-Type” designation indicates that it’s at least considering a plug-in sports car.

While Jaguar used to offer the S-Type and X-Type sedans (as well as an X-Type wagon, briefly), that style of name is currently used only by the F-Type two-seat sports car.

The name EV-Type is also a somewhat playful reference to the car that inspired the F-Type, the classic E-Type.

Much of Jaguar’s recent history with hybrid and plug-in electric powertrains has also involved performance vehicles.

The C-X16 concept — which previewed the production F-Type — featured a hybrid powertrain consisting of a 3.0-liter supercharged V-6 and eight-speed automatic transmission, paired with an electric motor and lithium-ion battery pack.

More audaciously, Jaguar also tinkered with the C-X75, a mid-engined supercar that first appeared at the 2010 Paris Motor Show with a plug-in powertrain that included a pair of gas-turbine engines.

Those were replaced by a 1.6-liter gasoline engine in an ultimately-failed attempt to make the C-X75 production-feasible. It was fun while it lasted.

It’s unclear whether the EV-Type has any connection to those previous experiments, or if Jaguar has any serious plans for the name at all at the moment.

Yet with global emissions standards getting stricter, Jaguar may have to take a more serious look at electrification in the near future.

]]>0Is Jaguar planning an electric sports car? We can hopeAll hail email, the anti-collaboration toolhttp://venturebeat.com/2014/11/23/all-hail-email-the-anti-collaboration-tool/
http://venturebeat.com/2014/11/23/all-hail-email-the-anti-collaboration-tool/#commentsSun, 23 Nov 2014 18:29:29 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1609688We may be abandoning Gmail for chats on Facebook Messenger (500 million monthly users) and WhatsApp (600 million monthly users), but for most of us, email remains the mainstay of our working lives -- and it’s a mainstay we hate.
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“There was a day when I looked up and realized that I had become someone who professionally replied to email, and who wrote as a hobby.”

Substitute “wrote” for whatever you’re supposed to be doing with your life, and this sentiment — as expressed in Neil Gaiman’s brilliant address to the University of the Arts Philadelphia — will probably resonate.

In fact, a 2012 McKinsey survey found that 28 percent of the average working day is taken up with email.

Never the most elegant of tools, email has in recent years come to seem a deep, dark oubliette of pain compared to the swift, bright streams of social media.

Even its value as a digital paper trail has been undermined by ‘sent on my iPhone’ disclaimers — which apparently absolve everything from bad grammar to bad decisions — and the trend for passive-aggressive, responsibility-shirking mass-cc’ing.

Then there’s the cross-pollination of social media idioms; I don’t know about you, but I find it hard to maintain my authority once I’ve unwittingly sent a client a kiss.

Seriously sticky

This is deeply perplexing to over-achieving entrepreneurs who would rather ingest high fructose corn syrup than open Outlook. Ever sexier collaboration tools continue to launch, with this year’s notables including Slack and Mailcloud.

I wish them luck, I really do; I long to extricate myself from email’s extraordinarily sticky web.

But I also suspect that these prospective email-slayers will follow the pattern set by Google Wave back in 2009: utopian high-five hype followed by rapid disillusionment, as users realise that they’re been spending more time dicking around with fancy colour-tags than nailing their to-do list.

Why? Of course, there’s the fact that most organizations find it hard enough to change their toilet paper supplier without a crisis, let alone shift their entire communications system. But the main problem is that email is not ineffective because of the nature of the technology, but because of the nature of the people using it.

Changing attitudes not apps

“Email is an open standard and universally accessible to anyone, anywhere in the world,” says Gordon Magione, founder of Tipbit, the startup that promises to return email to “killer app status.”

“Whether it involves a sign-up form or customer service, every web service is dependent on email — the only system in the world where a user can send a message regardless of infrastructure,” Magione writes. “And email is private and secure. It holds your data and a majority of your very personal information. There is so much more control with where and how you manage your information.”

Most of the things that annoy us about email — rambling, unactionable chains; all-hours interruption; impenetrable Powerpoints clogging up our server — are a result of bad working practices, not bad tech practices, and no amount of pastel-tinted streams with responsive tick-boxes are going to shift that.

Emails frustrates because it is a window onto both our and others’ procrastination, insecurity, one-upmanship, laziness and lack of self-control – not because its file size restrictions force us to use Dropbox once in a while.

In fact, many of the alternatives threaten to intensify email-based irritants.

Collaboration isn’t always the answer

The conversational ‘marketplace’ feel of collaborative platforms often impels people to be seen to contribute, whether they have anything of value to add or not.

This focus on visibility can reward time spent on the system rather than time spent doing work. Integration with other social platforms can blur personal/professional boundaries further and an ‘always-on’ stream of global content can make it even harder to switch off.

“It’s not wrong to offer new ways to collaborate within an office environment, but to try and replace email with these types of tools entirely is a recipe for disaster,” Mangione agrees.

Email is still necessary, especially in business, when communicating externally to partners, clients and beyond.

When discussing confidential business information, it’s certainly not going to be shared in a casual chat session, but rather over email where information and who sees it can be more controlled.

Email is most certainly rubbish at collaboration. It’s based on dialogue, but it’s not social; and it’s exactly this hyrbid status that makes it so valuable. Because we still don’t (or shouldn’t) expect our emails to be answered instantly, it allows room for more careful composition and thought.

So rather than adding another layer of digital into your work life, why not try rehabilitating the way you work.

Create clear folders and unsubscribe from your junk. Send short, clear, emails which are a record of actions that came out of real conversations over the phone or face to face.

Allocate times in your day to check emails, close your client in between, and spend the bits in between doing… well, whatever it is you do, other than collaborating, communicating, being publicly creative or all those deceptively important-sounding c-words that rarely result in anything other than purposeless noise.

]]>0All hail email, the anti-collaboration toolMeet the best poker players in Silicon Valleyhttp://venturebeat.com/2014/11/22/meet-the-best-poker-players-in-silicon-valley/
http://venturebeat.com/2014/11/22/meet-the-best-poker-players-in-silicon-valley/#commentsSun, 23 Nov 2014 03:00:00 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1612477“In general, great businessmen are great poker players. There’s a reason these guys made so much money in the real world. Those skills translate to poker,” Phil Hellmuth says.
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Every month, some of Silicon Valley’s biggest power players meet at the Palo Alto home of Chamath Palihapitiya, an early Facebook executive who now runs his own venture capital firm Social+Capital.

The guest list reads like a who’s who of Silicon Valley’s true elites: from Yammer founder David Sacks, SurveyMonkey’s Dave Goldberg and Inside.com’s Jason Calacanis to professional athletes and poker players, including the World Series of Poker champion Phil Hellmuth.

But this isn’t for some networking or investment opportunity of a hot startup. They meet for something much more fun: a game of poker.

“It was meant to basically put together 9 or 10 of the most competitive people in Silicon Valley and play poker,” Palihapitiya, who’s been hosting home poker nights for a few years now, told Business Insider. “Once you get this competitive group of people together on the same table, it’s super fun.”

The level of play is far beyond regular amateur tables. For example, Palihapitiya, who often walks off with the most chips, has played in some of the highest stake poker tournaments, including the World Series of Poker, where he finished 101st out of more than 7,000 contestants in 2011.

In fact, according to Hellmuth, a 12-time world champion in Texas Hold’em, the skill level is so high that he was only able to hit break-even in the first three years he played there. “In general, great businessmen are great poker players. There’s a reason these guys made so much money in the real world. Those skills translate to poker,” Hellmuth tells us.

“In general, great businessmen are great poker players. There’s a reason these guys made so much money in the real world. Those skills translate to poker,” Phil Hellmuth says.

Once the game starts, the intensity could easily turn up in a matter of seconds. They play for hours, well past 2AM on some occasions. And while the stakes remain relatively modest, $10,000 bluffs do happen in the most heated moments.

But Palihapitiya says the cash part of the game is mostly irrelevant. It’s rather about the thrill of playing and winning against highly competitive people, and just trying to master every nuance of a game that, he says, “you can learn so easily, but never master.”

Poker has relatively simple rules. In traditional Texas Hold’em poker, each player is first dealt a set of two cards, which are not shown to others, and then a shared pile of five cards on the table. The first three of the five shared cards are dealt at once, and after a round of betting, the fourth card is shown. The fifth card is uncovered after another round of betting.

But, in between each round of betting, there’s intense strategy and mind-games involved that requires a lot of intellect and discipline throughout the game.

That’s what makes poker such a complex — and fascinating — game, Palihapitiya says. There’s a chance of overcoming a poor hand, if you play it smart. Or you could lose everything with a single mistake, just when you thought you were going to win a big hand.

In that sense, Palihapitiya says, there’s a certain element of poker that almost “mirrors life and running a startup.” It’s why so many entrepreneurs love the game. He sums up the similarities in six distinct points:

Overcoming adversity:

Depending on how you play each round of betting, you could completely change the outcome of the game — regardless of what cards you are dealt at first. It’s just like being born into terrible circumstances in life but finding ways to overcome that and succeed. Palihapitiya relates to it personally, as he is a classic “rags-to-riches” story, having grown up on welfare as an immigrant in Canada to become one of the most successful tech entrepreneurs around. “That’s a characteristic of this game that very few games have,” he says.

Learning from mistakes:

You make plenty of mistakes in poker. The point is learning from those mistakes and fixing it in the future. “When you misplay your cards and lose a big hand, it’s an unbelievable moment of learning,” Palihapitiya says. It’s one thing not to repeat the same mistake, but it’s also important to know when you win by sheer luck. “Sometimes you just do something and it completely works, and you think to yourself, ‘I must be really good.’ The takeaway should be the exact opposite — you may have just gotten really lucky,” Palihapitiya says.

Knowing how to fake it:

Pretending like you have a strong hand, or “bluffing,” is a huge part of poker; all good players know how and when to use it properly. Palihapitiya says he doesn’t even look at his hand 90% of the time before placing his first bet. Similarly, in startups, it’s important to act confident at all times and believe in your product/vision, as he says, “In a startup, you have to fake it ’till you make it.” This is the same point Salesforce.com’s Marc Benioff says in his book, “Behind the Cloud”: “You have to act confident, even when you’re not.”

Being a “good loser”:

There are moments in poker when you lose big just when you thought you were going to win. It often causes huge emotional tilt and impacts your subsequent decision-making power. “If you can’t keep a clear head, you’re going to start making worse decisions and those decisions will compound,” Palihapitiya says. “Poker’s great because it teaches you how to be mentally disciplined in the face of adversity.”

Getting a better read of people:

The best poker players have an exceptional ability to sense others’ emotional energy. They can read how people feel or think by just looking at their reactions to certain moves or body gestures. Palihapitiya says that ability can help you in everyday life, too, as you become “more emotionally attuned to the people around you.” In other words, you can start understanding others better, coaching people better, and even negotiating better.

Making quick decisions and taking risks:

An average person’s life spans 80 to 90 years. Most startups are on a five-to-seven-year trajectory. A single round of poker, however, happens in a matter of just a few minutes. “Every hand in poker is a microcosm of that entire struggle (of life or a startup),” Palihapitiya says. You have to make quick decisions — and take risks — in a short period of time, with very limited information, and those decisions could have a huge impact on the outcome of the game. It’s why good poker players know how to make the right decisions quickly and take risks when needed.

Palihapitiya, who at age 26 was the youngest VP in AOL’s history, says he doesn’t have enough time to play poker as much as he used to anymore. But he still tries to tell others how great the game is through charity events, which many of his Silicon Valley friends join in together. For example, he donated all of his winnings from the World Series of Poker to the Boys and Girls Club, while he’s been hosting a number of different charity poker games that generate roughly $6 million a year.

“It’s really not about trying to make money – it’s about ‘Can you beat this guy?” Palihapitiya says. “Poker’s just a fascinating game of skill that’s exceptionally difficult to master. It really helps you disambiguate a lot of skills.”

]]>0Meet the best poker players in Silicon ValleyElectric motorcycle gangs: You’ll never hear them cominghttp://venturebeat.com/2014/11/21/electric-motorcycle-gangs-youll-never-hear-them-coming/
http://venturebeat.com/2014/11/21/electric-motorcycle-gangs-youll-never-hear-them-coming/#commentsSat, 22 Nov 2014 02:01:19 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1610861Bikers are pack animals by nature. They like to ride in groups and enjoy the open road with a few friends. Biker gangs are well known to ride together wearing the same leathers. Group rides for charity are common in the summer and fall riding seasons. Clubs form around brand names and styles of bikes […]
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Bikers are pack animals by nature.

They like to ride in groups and enjoy the open road with a few friends. Biker gangs are well known to ride together wearing the same leathers. Group rides for charity are common in the summer and fall riding seasons. Clubs form around brand names and styles of bikes alike.

Are there now groups of electric motorcycle riders tearing up the streets? Is it possible to have a group ride?

If you live in Los Angeles, the answer is yes.

Hollywood Electrics has been running group rides through the canyons north of LA every month for a while now. They generally have more than 10 electric motorcycles along for the ride, touring nearby scenic roads and then ending up at a restaurant that uses an electric motorcycle for deliveries.

What’s it like riding with a dozen or so electric motorcycles?

Well, you can have a conversation at any stoplight.

You get to see wild animals on the side of the road that normally would have fled due to the noise of loud pipes.

You don’t smell any fumes from the bikes in front of you.

You get smiles and stares (and sometimes questions) from people nearby whose ears aren’t offended by your engine noise.

You get to enjoy riding with all of the benefits of riding a powerful motorcycle safely in a group without any of the smell or noise associated with gasoline-powered bikes.

That isn’t to say that gasoline bikes aren’t allowed. Friends of people who ride electric motorcycles sometimes still ride them. And they’re welcome to join the ride and tag along–but their riders had better be prepared for some good-natured ribbing about the fumes they make and the noise that stifles conversation.

But bikers are bikers, regardless of electric or gas power; if you can ride, you’re welcome to join a group of people enjoying a two-wheeled ride through the canyons.

Long-distance rides

If you’re familiar with electric vehicles, you already know that range is limited and recharging time can be considerable.

Electric motorcycles have these limitations too, so long-distance journeys are still rare.

Terry has gone over 70,000 miles on his 2012 Zero S, which is now highly modified, and he has crossed the US five times. I rode my 2012 Zero S across the country in 2013, and also went on a 6,000-mile excursion in the summer of 2014. Stephane went on a 1,600-mile trip in 2014 on a 2012 Zero S with extra batteries.

To charge up, each of these bikers stopped for 30 minutes to 1.5 hours to recharge at Level 2 charging stations or RV parks.

This means that riding 400 miles in a day is possible, but it takes considerably longer than on a gas bike due to charging times. In fact, Terry Hershner recently joined the Iron Butt Association by riding 1,047 miles in 22 hours and 57 minutes.

I’ve gone on a few rides with friends who ride gas bikes, and it required some extra planning and time.

First I rode to a charging station near the fun roads we planned on riding that day. Then I charged up for about an hour with external chargers on my bike and my friends arrived when I was finished charging.

We rode for an hour and a half around Harriman State Park north of New York City, then finished back at the charging station in a little town nearby. We had lunch together while my bike charged again, and then we rode home. Total mileage together was a little over 100 miles.

For vacation riders you can go on a tour of the Alps on electric motorcycles with Eidelweiss Bike Travel or ride electric motorcycles around Cape Town, South Africa with Dualsport Adventures. Both companies offer tours with gas bikes, and have options for electric motorcycle tours with Zero Motorcycles. The Eidelweiss tour of the Alps is the same length as most of the tours with gas bikes, riding approximately 100 miles per day.

The range on electric motorcycles has increased every year, such that a full battery will get you about as far as a tank of gas on many bikes.

However, the recharge time is still the bottleneck. As soon as sites with CHAdeMO or CCS DC fast charging can be used with electric motorcycles, it will be possible for many more people to take longer electric road trips.

The future

For electric motorcycles to have the ability to go on long road trips with gas bikes–400 or more miles per day–there are several potential futures.

Battery technology could advance to the point where we have 10 times the energy density that we currently have. That would provide a 1,000 mile battery, making it unnecessary to charge during the day.

Faster charging would allow batteries to be charged as fast as gas bikes are filled up. For example, if a 15-kWh battery on a 2015 Zero S could use a Tesla Supercharger at 135kW to charge, it would take only about 7 minutes.

Multiple chargers, like those fitted to Terry Hershner’s bike, would allow the rider to plug two (or more) Level 2 chargers into their bike at the same time. Combined with higher battery capacity, this is a reasonable solution for the near future while we await any technological breakthroughs.

In the end, electric motorcycles are amazing to ride: Just ask anyone who has gone for a test ride.

But if you want to take a road trip, you will need to put a few extra dollars into your own faster charging system to take along for the ride–and bring a good book to read too.

And, by the way, if you see a “gang” of electric bikers … you may find them among the kindest and most considerate group of people you will meet.

One of the main philosophies in Peter Thiel’s book, and something he discussed a lot during a speech at the Demo conference on Wednesday, is the notion that successful businesses solve a specific problem, and go on to become a monopoly in their newly defined field. That should be an entrepreneur’s main goal, he believes.

Someone in the audience asked him what’re the top 3 unsolved problems that have the potential to become a successful and monopolistic startup in their field.

He mentioned a couple, such as the challenge of finding cheap and clean energy, as well as several diseases that still need cures, like Alzheimer’s’.

But there’s something else people need to keep in mind when starting a business.

“It’s always which problems are you really passionate about that are important that you can work on,” he said.

“I think for anyone founding a company, the three questions you’d answer are what are some important questions that, number two, you can contribute on solving, and number three, that for some strange reason other people are not really focused on, and they have some psychological block where they haven’t seen this as a problem that’s important and solvable.”

In other words, look for the problems that you’re passionate about solving, but that other people think are either impossible to solve, or too small to bother with. That’s where to start.

]]>0The secret to creating a huge company, according to Peter ThielSorry, Taylor: Spotify is going to be part of the Billboard chartshttp://venturebeat.com/2014/11/19/sorry-taylor-spotify-is-going-to-be-part-of-the-billboard-charts/
http://venturebeat.com/2014/11/19/sorry-taylor-spotify-is-going-to-be-part-of-the-billboard-charts/#commentsThu, 20 Nov 2014 05:00:00 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1609523Billboard and partner Nielsen SoundScan will soon start counting streaming services like Spotify and Beats Music in its signature ranking, the Billboard 200, reports The New York Times’ Ben Sisario. Under the new rules, 1,500 streams will equate to one album sale. Likewise, 10 individual song downloads will also count for an album sale. The move to […]
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Likewise, 10 individual song downloads will also count for an album sale.

The move to include streaming services in Billboard’s ranking is a boon for younger artists, whose listeners are used to going online to for their music.

The news comes as Spotify, one of the most prominent music streaming services, has been waging a war of public opinion with Taylor Swift, who pulled her catalogue from the service last week.

Time will tell if artists who, like Swift, have pulled their music from Spotify will get the short end of the stick with this move. Common sense dictates that without the streaming numbers giving artists that bump, those musicians would be at a disadvantage.

The Billboard 200 is arguably the most powerful chart in the music business with regards to album sales. As of this writing, Taylor Swift’s “1989” is number 1.

]]>0Sorry, Taylor: Spotify is going to be part of the Billboard charts6 big mistakes you need to avoid in your pitch deckhttp://venturebeat.com/2014/11/17/6-big-mistakes-you-need-to-avoid-in-your-pitch-deck/
http://venturebeat.com/2014/11/17/6-big-mistakes-you-need-to-avoid-in-your-pitch-deck/#commentsTue, 18 Nov 2014 01:04:14 +0000http://venturebeat.com/?p=1607924Guest:Here are the six biggest mistakes to avoid in your pitch deck.
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The list of his accomplishments this year is nothing short of amazing. Still, it is rare for a pitcher to be awarded the MVP, which is usually given to a slugger who plays daily.

Since the pitch starts every play in baseball, I wonder why MVP recognition of a pitcher is so rare. This prompted me to start wondering about the value of really good pitching in business as well as baseball.

Over the last four weeks, I have judged and observed many pitches made by biotech and med-tech CEOs. I was even a “pitch doctor” at the Life Sciences Summit several weeks ago. Several companies have asked for my help in raising money and so I have been working with them on their pitches.

I was debating this with my friend, Kristian Andersen, who told me that the formula for a great pitch is quite easy. He has reached this conclusion after working with many companies through his strategic design consultancy, KA+A, and as the head of Gravity Ventures, a seed stage investment firm. Kristian worked on the road show presentations for several very successful companies, including Angie’s List, LifeLock, and ExactTarget, to name a few.

He considers the pitch to be the intersection of design and investing, and offered the following tips.

Here are the six biggest mistakes to avoid in your pitch deck:

1. Bad design: One of the simplest, but most often overlooked, aspects of a winning pitch deck is design. There is no question that a well-designed presentation is more compelling and effective than a presentation that is thoughtlessly designed. This may seem obvious, but you’d be amazed at the number of promising startups that fail to achieve lift off because they turned a blind eye to the power of design.

Above: Pitch deck design matters

2. Claiming you have no competitors: One of the most basic, rookie moves you’ll see first time entrepreneurs make is to claim that they don’t have any competitors. This is at best false and at worst delusional. Any market that is worth pursuing will have competitors, even if you don’t think of them as competitors. A competitor can be anything that is competing for your prospects’ dollars.

3. Failing to establish your own credentials: At the end of the day, investors are investing in people. Yes, market size, product/market fit, and the business model all matter, of course. But the single most important aspect of the business is, “Who’s running it?” Take the time to show your credentials and give investors a reason to believe that you are the best person in the world to launch and grow the business.

4. Underestimating the importance of storytelling: Most entrepreneurs fail to understand that a pitch deck is really a story. It’s a plot-driven narrative, complete with protagonists (your product), antagonists (your competitors), a climax (product/market fit, first big enterprise client, etc.), and a denouement (the exit). Nothing captivates an audience like a compelling story. After all, stories are easier to understand, share and get excited about.

5. Too many slides = bad. You’ve only got a limited amount of time with an investor and that investor has a very limited attention span. Relentlessly edit your pitch deck for brevity and impact. The law of diminishing returns is especially true when it comes to presentations. Ten to 15 slides are sufficient for almost any startup. Using more, you run the risk of coming across as muddled and indecisive.

6. No clear call to action: Many a great pitch has been ruined by a conclusion that lands with a thud. You’ve done a great job of explaining your business and painting an ambitious vision for the future but then you fail to provide clear next steps to your audience. Always finish your pitch with a clear ask (usually funding, but it could be advice, connections, etc.). Tell them specifically what you are asking for (and the terms) and provide them with an easy way to follow up.

Spring training is just around the corner; the Opening Day starters will soon be announced.

Make your pitch count.

Batter up!

Joseph V. Gulfo, MD, MBA, is the author of Innovation Breakdown: How the FDA and Wall Street Cripple Medical Advances and CEO of Breakthrough Medical Innovations, a team of biopharma and medtech consultants. An Inc.com contributor, he also teaches graduate cancer biology and business and entrepreneurship classes and maintains an educational cancer biology blog. Dr. Gulfo received his MD from University of Medicine and Dentistry of New Jersey, and his MBA from Seton Hall University.

]]>06 big mistakes you need to avoid in your pitch deck5 founder-friendly financing terms that give power to entrepreneurshttp://venturebeat.com/2014/11/16/5-founder-friendly-financing-terms-that-give-power-to-entrepreneurs/
http://venturebeat.com/2014/11/16/5-founder-friendly-financing-terms-that-give-power-to-entrepreneurs/#commentsSun, 16 Nov 2014 23:19:33 +0000http://venturebeat.com/?p=1597893Guest:For many startups, the hot venture-capital and exit markets mean an increase in deal leverage when negotiating with venture investors. As a result, founder-favorable terms are increasingly a part of formation and financing documents where they wouldn’t have been just a year or two ago.
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In the first half of this year, the level of venture-capital investment hit its highest quarterly mark since Q2 2001. Big M&A deals like WhatsApp, Oculus and Zillow have become prolific. And more and more companies are getting financing at eye-popping valuations.

For many startups, the hot venture-capital and exit markets mean an increase in deal leverage when negotiating with venture investors. [Editor’s note: Venture capitalists have noticed, and are trying to differentiate themselves.] As a result, founder-favorable terms are increasingly a part of formation and financing documents where they wouldn’t have been just a year or two ago.

The are several founder-favorable terms we’re seeing more frequently today. Not many companies or deals have all, or even most, of them. And choosing among them is usually linked to founders’ specific hot buttons. Regardless, all are worth considering, and often worth considering early.

1. Retain control: Supervoting Stock

What it is: “Supervoting stock” allows founders to maintain control as stockholders throughout the life of the company, even as their ownership is diluted. To implement supervoting stock, the company will typically establish two classes of common stock, Class A and Class B. Class A common stock will carry multiple votes (usually 10-20, sometimes more) per share on all matters in which shareholders are required to vote, as compared to Class B which will carry one vote per share. Founders will be the sole owners of the Class A supervoting stock, and Class B common stock will be reserved for issuance under the company’s option plan to the rank and file. Setting up supervoting will ensure that founders will be able to retain a greater level of control over their company over a longer period of time.

Additional considerations: Supervoting stock only works if founders have enough leverage to negotiate for its survival at each round of financing. If the founders are confident they can maintain that kind of leverage, then supervoting stock may make sense for a startup. It may, however, come at a price down the road on an IPO, since public-market investors can impose a discount on the “inferior” Class B stock that gets issued when a company goes public.

When to implement: Supervoting stock should be implemented at formation. If the founders choose to adopt supervoting stock after formation, all then-current common stockholders will be entitled to receive supervoting stock, or must voluntarily elect to convert their supervoting stock into non-supervoting stock in exchange for something in return. This voluntary conversion may be difficult to accomplish and is, in any event, suboptimal from the founders’ standpoint.

2. Alternative: Supervoting at the Board Level

What it is: Supervoting at the board level means that the board seats held by the common stockholders get a multiple (e.g., 2-5 times) on their votes. As a result, the common director designated by the common stockholders will have control over major board actions, such as effecting M&A transactions or creating new classes of stock in future financings.

Additional considerations: Supervoting at the board level achieves a similar result as supervoting stock—the founders retain greater control—but it is less direct: The common holders control the board, but they don’t have greater control at the stockholder level. Importantly, board members owe fiduciary duties to the company stockholders that stockholders don’t. This means that the common directors voting at the board level could theoretically be forced to vote against their own interests as individual stockholders, if so doing would be in the best interests of the company. Notwithstanding that fact, supervoting at the board level ensures that founders will have substantial say in all major corporate decisions.

When to implement: A major advantage of supervoting at the board level is that founders don’t have to implement it at formation. Founders can choose to amend their charter after formation to implement board-level supervoting, for example, at the time of a financing when they add directors and lose numerical majority status on the board.

3. Early Liquidity: FF Preferred Stock

What it is: FF Preferred Stock is stock issued to founders that acts like common stock, except that it has a special conversion feature allowing it to be “cashed out” prior to acquisition or IPO, when founders would otherwise normally get liquidity. Here’s how it works: the company issues a portion (usually 10 to 33 percent) of a founder’s total equity as FF Preferred Stock. The FF Preferred’s conversion feature allows it to be exchanged into Preferred Stock in a future round of financing at the time, and at the price, at which that Preferred Stock is issued. Practically speaking, when a venture capitalist makes an investment in the company, the VC can buy FF Preferred from the founders as part of its total venture investment, and the FF Preferred will automatically convert into that series of Preferred Stock. The VC gets its preferred equity, and the Founder gets early partial liquidity. The FF Preferred model is also less dilutive to the founders than if the VC purchased all of its shares from the company.

Other considerations: Any time a founder sells shares to gain liquidity, there are tax consequences both to him as an individual and to the company. Other ways of getting liquidity, such as selling common stock directly to investors, can have negative tax implications, and also may affect the price at which company options are issued. In addition, if a founder sells common stock directly to an investor, the delta between the sale price and the then current fair market value of the common stock is usually treated as ordinary income. By contrast, with FF Preferred Stock, a founder who has held his shares for more than one year may be able to take advantage of more favorable capital gains treatment on that delta, without implicating Company option pricing.

When to implement: Practically speaking, FF Preferred Stock must be implemented at formation.

4. Limit the VC’s Control: Voting Control

What it is: Over time, we’ve noticed that more and more companies are unwilling to provide investors some of the protective voting provisions that have historically been standard to give, such as voting blocks on acquisitions and on future equity financings. By eliminating these voting-control provisions, companies give founders the freedom to dictate when and whether the company sells or raises capital. VCs will always receive some protections in their investment documents, but these provisions are increasingly limited to preserving negotiated-for rights of the investors, such as the Preferred Stock liquidation preference or the right to elect a director.

Alternative construction: Rather than eliminating protective provisions during financings, which in many cases is not feasible, founders can achieve “negative” control by writing in mirror-image protective provisions for common stock. The holders of preferred stock receive voting blocks for M&A events or future equity financings, but the common holders also enjoy these same voting blocks. This means the investors and founders must be in lock-step on all major corporate actions.

When to implement: Protective voting provisions will be negotiated during each round of financing with each new investor.

5. Greater Ownership: Aggressive Founder Vesting

What it is: Increasingly, founders are able to maintain aggressive provisions on founder vesting. Instead of the “4-year vesting with a one-year-cliff” paradigm that has long been the norm for Silicon Valley startups, some founders have vesting provisions that give them full vesting in three years (or less), often without a vesting “cliff.” These aggressive vesting schedules are usually coupled with partial acceleration on certain events such as changes in control or involuntary terminations without cause. We’re seeing implementations of founder-favorable vesting / acceleration regimes during seed and angel rounds where investors are less concerned with founder vesting and are inclined to punt on these issues until the next (larger) round of financing.

Other considerations: In most cases, founders should take care not to be overly aggressive with vesting and acceleration, since doing so is likely to increase the chances an investor will want to renegotiate a founder’s compensation arrangement entirely at the time of financing. When we set up companies, we advise them as to the range of possibilities on vesting and acceleration but try to end up somewhere within market, even if on the pro-founder end of the spectrum.

When to implement: Founder vesting should be implemented at formation if there are multiple founders and, in any event, prior to a financing round.

Caine Moss, a partner in Goodwin Procter‘s Technology Companies Group, has significant experience working with software, telecommunications, Internet, and financial services companies through all stages of their growth. In addition, he has broad transactional expertise, particularly in the areas of venture capital, public and private mergers and acquisitions, and representation of issuers and underwriters in public equity offerings. He is a key contributor to Goodwin Procter’s Founders Workbench, an online resource for startups, emerging companies and the entrepreneurial community.

Emma Mann-Meginniss is an associate in the Goodwin Procter’s Business Law Department and a member of its Technology & Life Sciences Group. She advises founder, company, and investor clients on a variety of corporate and transactional matters, including formations, financings, investments, and mergers and acquisitions.

]]>05 founder-friendly financing terms that give power to entrepreneursSharing Economy Series: 5 lessons on making your marketplace survive its first yearhttp://venturebeat.com/2014/11/16/sharing-economy-series-5-lessons-on-making-your-marketplace-survive-its-first-year/
http://venturebeat.com/2014/11/16/sharing-economy-series-5-lessons-on-making-your-marketplace-survive-its-first-year/#commentsSun, 16 Nov 2014 19:35:53 +0000http://venturebeat.com/?p=1606997Guest:Like most marketplace businesses, we wrestle with the inherent challenges of seeding and growing a marketplace with two user bases, as well as navigating an industry adverse to change. One year in, I've got some tips.
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My company — my baby — just turned one. As Priori Legal celebrates our first year of business, I’ve been spending a lot of time considering what’s worked, what hasn’t and where we’re headed in the months to come.

Like most marketplace businesses, we wrestle with the inherent challenges of seeding and growing a marketplace with two user bases, as well as navigating an industry adverse to change (law).

Hopefully, my experiences can be instructive to others considering founding a two-sided marketplace, disrupting a “sleeping giant,” or (not for the faint of heart) both.

Lesson #1: Get out there and test it out.

In our early days, we spent a lot of time collecting feedback from lawyers and clients about how our marketplace could best serve each audience, and more importantly, what would keep them coming back after the initial introduction. And while we learned important lessons through this feedback, in hindsight, we could have started to test some of those theories before we even had a fully operational website.

The best (unheeded) advice I received from the founder of a marketplace was this: Making it actually work for five clients is more valuable than interviewing 50. Testing with an extremely lean (or nonexistent) product is more cost and time efficient.

Also, you might just discover that what people SAY they want, and how they actually use your product could be quite different.

Lesson #2: For high-value marketplaces, staying relevant is key.

Marketplaces, especially professional services marketplaces, struggle to stay relevant after the first interaction.

By way of comparison, look at businesses like Uber. Uber doesn’t fear being disintermediated by users and drivers forming relationships outside of their service, because the point is on-demand service. As a user, I couldn’t care less which Uber driver I get, as long as they come quickly and get me to my destination reliably. The same, more or less, holds true for AirBnB because I’m not looking for the same thing on a repeat basis.

For us, though, clients and lawyers form long-term relationships, and we need to continue to provide value on an ongoing basis so we don’t become an irrelevant middleman.

In our business, we create value by streamlining invoicing, billing and collections, which saves time, headaches and additional costs on both sides of the marketplace. And we also maintain a diverse pool of high-quality lawyers so that businesses know that while they may have found an excellent corporate lawyer with us, they can also turn to us to handle intellectual property, FCPA compliance, premises liability issues and so on.

The key takeaway for us has been to really explore what drives value and make sure we continue to provide it frequently.

Lesson #3: Don’t be afraid of unpopular decisions.

Priori’s bet on the legal market is that quality legal services will win over commodified legal services. That has meant two types of really tough decisions:

(1) We have to reject a lot of lawyers (currently, only 20 percent of lawyers who apply meet our strict quality standards), and by doing that, we run the risk they might be none too pleased with us. No new brand likes to be in the position of rejecting potential users. Ultimately, though, quality control is one of our main drivers of value for businesses. By carefully curating our lawyer network, we save small businesses days of time they might otherwise have spent asking for referrals and interviewing lawyers.

(2) Our road to scale is longer than others with a more inclusive approach. Our lawyer vetting process is intensive, and our team often spends hours vetting each lawyer: evaluating their application, background checking them, interviewing them face-to-face, and checking references. Certainly, there are ways to grow our network faster, but Priori’s brand is all about quality over quantity.

There have been times that I’ve doubted whether we have taken the right tack, but a year in, our moments of unpopularity have paid off with very loyal clients as vociferous brand advocates.

Lesson #4: If you are attacking a sleeping giant, remember incremental change is one step in the right direction.

As I’ve learned in the past year, if an industry hasn’t embraced technology with open arms, there are probably entrenched, powerful players and/or many disorganized players who will take time (and some proof of success) to sway.

But no industry is immune to consumer demand, and in legal, consumers are demanding a more transparent marketplace, a move away from the billable hour, easier access to lawyers and faster legal services.

To disrupt a sleeping giant, you need to move strategically, addressing problems in the here and now, rather than throwing the baby out with the bathwater.

At Priori, we believe that hourly billing for legal services is on its last legs, but if we insisted that all lawyers abandon it wholesale, we would lose out on the opportunity to work with many excellent lawyers. Instead, we encourage the use of fixed and other alternative fees and provide tools and analytics that encourage their adoption to move the needle slowly.

Lesson #5: Last but not least: OMG. Have fun!

A new company — especially one that is entering a challenging field — has to be a labor of love. There will be down moments (or weeks), but if you can’t find joy in the everyday, you won’t succeed. When I look around my office and see my 9 employees working tirelessly to change the market for legal services, it makes me smile. And, it’s not so bad when we have a happy hour either.

At every stage of running a business, there are infinite lessons and skills to learn. (Right now, I’m working on not micromanaging). But, my view from year one is success is a slow, iterative and deeply gratifying process. Good luck!

]]>0Sharing Economy Series: 5 lessons on making your marketplace survive its first yearFor innovation’s sake, we can’t be neutral on net neutralityhttp://venturebeat.com/2014/11/16/for-innovations-sake-we-cant-be-neutral-on-net-neutrality/
http://venturebeat.com/2014/11/16/for-innovations-sake-we-cant-be-neutral-on-net-neutrality/#commentsSun, 16 Nov 2014 18:49:20 +0000http://venturebeat.com/?p=1607021Guest:On Monday President Obama released a statement about the importance of net neutrality to ongoing innovation. And I couldn’t agree more. The Open Internet is a Proven Platform for Innovation For the last 25 years, the open Internet has been the fundamental enabler of new business and innovation around the world. No other technology has so […]
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The Open Internet is a Proven Platform for Innovation

For the last 25 years, the open Internet has been the fundamental enabler of new business and innovation around the world. No other technology has so radically changed how we live and work in such a short amount of time.

But it’s only in the last few years, with the proliferation of mobile broadband and the near-ubiquity of always-on residential broadband, that we have started to glimpse the Internet’s true potential for creative disruption.

The Internet has given digital entrepreneurs an unheard of level of career flexibility, self-determination, and opportunity for experimentation. From a digital freelancer with a virtual cafe office to a small group of developers renting a beach houses to code the next messaging app, these new work styles wouldn’t be possible without access to the Internet. Our marketplace is global, and entrepreneurs are constantly finding new and innovative ways to improve every aspect of how we create and share as a global community.

The Network is the Thing

But while the Internet is a rich interconnected ecosystem full of competition and choice, most Internet users often have little choice in how they connect to it. Customers in many areas are limited to a single broadband ISP (or two if they’re lucky) since cable and telephone companies have geographic monopolies or duopolies in many parts of the United States.

Net neutrality would treat access to the Internet like a utility, prohibiting broadband providers from deciding which sites or applications (including their own) should get priority treatment, and guaranteeing that consumers and businesses are able to use whatever legal applications and services they choose.

Your ISP won’t be able to tell you which apps you can or can’t use on their network — the same way the water company can’t tell you how to use the water that comes out of your tap.

Simply put, net neutrality can prevent the 2014 Internet from regressing into the 1990s AOL network, where every service was AOL, and only AOL.

An Interconnected Ecosystem Is Only as Strong as its Weakest Link

Some people have compared limiting Internet access to the bundled packages of TV channels that cable companies offer. But the scenario is even more complex. Cable TV channels are standalone services. The Weather Channel doesn’t rely on MTV or HBO to function. Cable companies might force you to buy several channels to get the one you actually want, but those channels don’t actually depend on each other to operate.

Net neutrality, however, isn’t just about Netflix not streaming in HD or having to pay extra to use Spotify instead of Pandora (although those restrictions would be onerous enough). This is about the increasingly interconnected mesh of Internet services and APIs that enable so many of the Internet applications we use on a regular basis.

Modern web sites aren’t monolithic entities served from a single source. They’re complex applications comprised of multiple services connected through web APIs. These services pull information from numerous servers and databases to create rich user experiences. Limiting or degrading access to any one of these services could affect numerous other sites as well.

Consider how many web applications use the Google Maps API or depend on Facebook for logging in users, or how many services are completely hosted on Amazon’s S3 computing platform.

This nightmare scenario isn’t limited to affecting individual websites. Whole networks of interconnected services could be effectively blacklisted from large groups of Internet users. Critical services would be replaced with inferior offerings from companies that have cut financial deals with service providers for preferred or exclusive access to their customers.

History Repeats, Unless We Stop It

It may seem like ancient history now, but the twenty-first century got off to a rocky start as far as the open Internet goes. When Internet Explorer had over 90 percent of the browser market, Microsoft was able to leverage proprietary web technologies to maintain control of the desktop computing experience by tying advanced web functionality to Windows. This stifled any web innovation that relied on modern, cross-platform web standards.

Fortunately, competitors like Firefox, Safari, and Chrome emerged and offered an experience that was compelling enough for users to download and install another browser. These newer browsers supported vendor-neutral web standards that enabled rich, desktop-class experiences in the browser — experiences that we take for granted only a few years later.

But if Internet service providers are able to limit which services users can connect to, there won’t be such an easy fix.

It Can Happen Here …It’s Happening Already

Data is data, but even while arguing that further net neutrality mandates are unnecessary, ISPs and wireless providers are still exerting undue control over how their networks are used.

In recent examples, we’ve seen attempts by ISPs to control network applications at the edge. In 2007 Comcast was found to have intentionally degraded peer-to-peer traffic on its network. Then in 2010 it played hardball with network provider, Level 3, to extract higher fees for Netflix traffic crossing onto the Comcast network — traffic that both Netflix and Comcast customers were already paying for. Verizon recently did the same thing.

It isn’t surprising that the companies campaigning against net neutrality regulations are the ones that consistently rank the lowest in customer satisfaction surveys: wired and wireless broadband providers.

Mobile was at a Standstill

The situation with wireless providers is even more fragile. Before the introduction of the iPhone in 2007, wireless providers had almost complete control of the apps installed on any smartphones that connected to their networks. If wireless providers still had their way, mobile apps like Instagram, Uber, and WhatsApp might never have existed.

Even today, wireless providers often charge an additional fee to allow customers to use the Wi-Fi hotspot feature built into their phone, even though that data is already included in their service plan. Now those customers are being asked to pay twice for the right to use their connection the way they want. This is a clear example of how Internet providers can abuse their power and increase costs without adding any value.

This control even extends to the hardware itself. While most phones around the world can be switched between carriers by swapping a SIM card, Verizon is notorious for only allowing Verizon-specific devices on its network. This practice harkens back to the Bell Telephone days when only Bell-approved phones where allowed to connect to the telephone network. Do you remember much telephone innovation happening between 1913 and 1984? I don’t. In seventy years, we went from rotary dialing to touch tone. That’s about it.

The Fallout Affects Everyone

Businesses and entrepreneurs have built companies that increasingly rely on open and unfettered access to the Internet. Right now, we’re fortunate enough to have a rich marketplace of ideas and innovation that allows the top talent and the best products and services to rise to the top. It empowers entrepreneurs to experiment with new business models and technologies while giving customers an unprecedented level of transparency and choice.

Let’s make sure we don’t lose all that by allowing a few corporations to dictate what we can access on the Internet.

]]>0For innovation’s sake, we can’t be neutral on net neutralityYou can now play Super Smash Bros. on a TI-83 graphing calculatorhttp://venturebeat.com/2014/11/15/you-can-now-play-super-smash-bros-on-a-ti-83-graphing-calculator/
http://venturebeat.com/2014/11/15/you-can-now-play-super-smash-bros-on-a-ti-83-graphing-calculator/#commentsSun, 16 Nov 2014 03:41:08 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1606609We truly are living in the future. Nintendo is about to release “Super Smash Bros. for Wii U” next Friday, but why wait to see your favorite Nintendo mascots duke it out in stunning high definition when you can play one of the most addictive fighting games of all time on a low-definition graphing calculator. […]
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We truly are living in the future.

Nintendo is about to release “Super Smash Bros. for Wii U” next Friday, but why wait to see your favorite Nintendo mascots duke it out in stunning high definition when you can play one of the most addictive fighting games of all time on a low-definition graphing calculator.

The game was created by a user on the Omnimaga forums named Hayleia, who created the clone of “Super Smash Bros. Melee” for the Nintendo GameCube for monochrome z80 calculators. The user also made the game on a modular engine, so you can tweak and edit the source code and optimize it for their own device.

]]>0You can now play Super Smash Bros. on a TI-83 graphing calculatorUber’s revenue just leaked and it’s more than you thinkhttp://venturebeat.com/2014/11/15/ubers-revenue-just-leaked-and-its-more-than-you-think/
http://venturebeat.com/2014/11/15/ubers-revenue-just-leaked-and-its-more-than-you-think/#commentsSat, 15 Nov 2014 23:40:00 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1606610Mobile ride hailing startup Uber is expected to hit an annual revenue run rate of $10 billion by the end of 2015, sources told Business Insider’s Henry Blodget. Uber keeps 20 percent of every transaction, which means Uber will be netting about $2 billion on $10 billion gross revenue. What’s more, most of Uber’s revenue […]
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Uber keeps 20 percent of every transaction, which means Uber will be netting about $2 billion on $10 billion gross revenue.

What’s more, most of Uber’s revenue comes from 10 of its earliest cities, including San Francisco and New York. When its other 140+ cities mature, you can imagine that $10 billion revenue figure multiplying quickly. San Francisco alone generates hundreds of millions of dollars for Uber. Uber is operating in more than 45 countries without having made a single acquisition.

Let’s say that all again:

Uber is expected to generate $10 billion of which it keeps $2 billion in the next year or two.

That’s not to say the company is profitable. It spends tons of money on marketing tactics to recruit new users and drivers. Still, those figures for a five-year-old startup are staggering.

To put that in perspective, Facebook is expected to generate $10 billion for the first time this year, after 10 years of operation. Granted, Uber and Facebook are entirely different businesses (advertising versus transactional) but yah, $10 billion is a lot.

Blodget also learned that Uber’s revenue will grow about 300 percent this year and it’s expected to grow another 300 percent next year.

Further, Blodget’s sources believe Uber will go public in a few years at a $50-10 billion valuation. Uber’s last valuation exceeded $18 billion.

]]>0Uber’s revenue just leaked and it’s more than you thinkInternational payments services are flocking to Chinahttp://venturebeat.com/2014/11/14/international-payments-services-are-flocking-to-china/
http://venturebeat.com/2014/11/14/international-payments-services-are-flocking-to-china/#commentsSat, 15 Nov 2014 03:42:51 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1605741More than a few international payments services recently said China had become one of their biggest markets, as an increasing number of Chinese Internet/mobile companies are actively expanding overseas.
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More than a few international payments services recently said China had become one of their biggest markets, as an increasing number of Chinese Internet/mobile companies are actively expanding overseas. They find, unsurprisingly, their Chinese customers are mainly gaming companies, for in China, gaming is one of the top revenue-generating online businesses, and one of the first to enter overseas markets.

While Google Play and Apple’s App Store make distributing software applications outside mainland China so much easier than before, prevailing online payments services vary among different countries or regions. Most Internet/mobile companies, including the Chinese ones, have to work with third-party payments companies that keep integrating different types of payments methods and services around the world.

OKPAY, an Europe-based payments company, finds 20 percent of its customers are from China. The service got traction in China after it began supporting Bitcoin transactions on some Chinese exchanges. To better serve Chinese customers, OKPAY has launched the Chinese version of its services and hired Chinese customer service representatives. Currently OKPAY’s customers in China are mostly individuals. The company hopes to power Chinese online retailers who export goods to markets where OKPAY has a strong presence.

Paymentwall, which has integrated more than 120 payments options, is preparing to open an office in Beijing, China. Chinese payments services, including Alibaba’s Alipay, have been integrated into its all-in-one solution. As the company primarily serves digital content or service providers, its Chinese customers are most gaming companies. To their surprise, the Chinese gaming companies least likely to enter overseas markets began to work with them. Like OKPAY, Paymentwall is considering expanding its customer base in China to include physical good retailers.

]]>0International payments services are flocking to ChinaToo much transparency will not kill youhttp://venturebeat.com/2014/11/14/too-much-transparency-will-not-kill-you/
http://venturebeat.com/2014/11/14/too-much-transparency-will-not-kill-you/#commentsSat, 15 Nov 2014 00:30:34 +0000http://venturebeat.com/?p=1605842Guest:There is no greater motivation for founders than to be in a glass house, accountable not only in front of investors and teammates, but in front of the whole world.
]]>GUEST:

First of all, a disclaimer: I have a tremendous respect for you, Mark (allow me to address you directly, like I would do with the Pope, or the President of the United States, or Kim Kardashian), I really do. I’ve been reading your posts and watching your presentations since I first started doing startups and making my fair share of mistakes. I just love you, and I’m super thankful for all the things you write and the precious experience you’ve shared from “both sides of the table.”

But @ssholes are one thing, and transparency is something else. I’m not sure why the two concepts are paired up and treated as equals in your post. The investor you mentioned was shopping around, leveraging the name of Upfront Ventures to gain a credibility he clearly didn’t have, something that rightfully made you furious. Totally understandable. But how is this related to transparency? To me, it’s not. I would love to see more companies be more transparent about their numbers and challenges and internal procedures; not less. There is so much to learn — and so much to understand about how a company is run —from that information. It’s pure gold.

And more and more companies are becoming more and more transparent nowadays. The example everyone’s heard of is Buffer. They not only shared their Compensation Policy, but also their Cap Table and their real-time dashboard, not to mention their monthly investor update (here’s the link to the October one, just released). If that wasn’t enough already, just a couple of weeks ago Joel and Leo also released all the information on their new round.

Radical transparency, some would say. What good did this do the company? Funding-wise, they closed the round literally in a few hours; press-wise, they probably got the biggest coverage ever. Business-wise? Well, Leo said it already better than me. The day after releasing the blueprints for the round, he wrote:

Yesterday was also our biggest day for signups ever. Incredible to see what the repercussions of transparency trigger!

Now, Buffer is one or two orders of magnitude ahead of the others, but there *are* other entrepreneurs sharing a wealth of data on how their companies grow, the challenges they face, the milestones they conquer, and the learning they discover. Josh Pigford of Baremetrics.io is one of those, as is Alex Turnbull of GrooveHQ.com with his “journey to $100k in monthly revenue”, not to forget Danielle Morrill of Mattermark.com (her post on Burn Rates is Internet famous) or Mikael Cho of Crew (this is his September update, I guess the October one is coming). All of these founders show different kinds and levels of transparency. At my company, AdEspresso, we contribute to this transparency movement in our own way — for starters, by tweeting out the major growth metrics literally a few hours after the end of the month:

And, yes, we share the financial data and full report on all the fundamental metrics we track with *all* investors (the complete list, as well as the trailing numbers for the major high-level metrics, can be found on our angel.co profile) and with our *whole* team also. Are we foolish? Is Buffer crazy? Maybe. Or maybe what we see is a much higher upside compared to the potential downside.

What’s the downside? Easy: Your competitors will see the numbers. Here’s my simple question to you: “So what?” If the competitive advantage of your company is in hiding the financials, well, I’m not sure you’ll be able to stay ahead for long. Fred Wilson a few days ago wrote, “Assume that your competitor will raise a lot of money.” Let me rephrase that and say: Assume your competitor will know your numbers.

If you ask me, there is no greater motivation for founders than to be in a glass house, accountable not only in front of investors and teammates, but in front of the whole world. You’ll work the hardest to be able to reach your goals and share good numbers instead of bad ones. Sure enough, things can go wrong. But if you’ve built enough credibility and a product that has some level of market fit, isn’t it much more likely that a bigger company will come around trying an acquisition when your growth starts to languish? I realize that it may be an uncomfortable thought for many, but to me it is a much more likely scenario compared to the traditional hide-and-seek game. Much more fun also. By the way, the company acquiring you will want the numbers disclosed at some point, right?

And if your company is crushing it, isn’t sharing the numbers an added value on top of your already compelling story? It breeds credibility, it builds the brand, it helps the community, it’s intrinsically good.

As a plus, consider another thing. In an ecosystem where more and more companies start to willingly share some of their numbers and progress, isn’t that good also for investors? How easy would it be to spot the non-virtuous companies? How easy would it be to make an investment decision? Oh, and in that scenario, going back to the @sshole you mentioned in your post, he would have lost a big part of his leverage, because everybody could have accessed those numbers without even blinking.

It’s unlikely that every company will start to share its numbers publicly, but it’s likely that those who do will be rewarded in terms of valuation, market, and mindshare. Will that impact the number of @assholes around? Not really; @ssholes will always be around, that’s just the way it works, but they’ll likely have less leverage. At the same time it will be easier for investors to make decisions based on real numbers.

On the flip-side, the best deals will become hyper-competitive … oh, wait, they already are!

Who the f*ck am I, by the way? A relatively successful young founder with a bunch of tiny angel investments under my belt, nowhere near your level of expertise and success though. So I could be just a guy full of cr@p. But to me, all the secrecy surrounding the numbers and performances of private companies sounds a lot like when startups were in “stealth mode” five to 10 years ago. All secretive and shady and unclear, for months if not years.

Look at how many companies are in stealth mode nowadays and how many people think that stealth mode is a good idea. Five out of one thousand, maybe? Maybe, just maybe, five to 10 years from now “stealth metrics” will be seen the same way stealth mode is today.

With much love and respect, Armando.

Armando Biondi is cofounder and COO of AdEspresso, a Saas Solution for Facebook Ads Optimization. He previously cofounded five other tech and non-tech companies. He’s also an angel investor in Mattermark and 14 more companies, is proudly part of the 500 Startups network, and is an occassional mentor.

]]>0Too much transparency will not kill youHouzz’s CEO talks about the company’s expansion in Germany, growth, and familyhttp://venturebeat.com/2014/11/13/houzzs-ceo-talks-about-the-companys-launch-in-germany-company-growth-and-family/
http://venturebeat.com/2014/11/13/houzzs-ceo-talks-about-the-companys-launch-in-germany-company-growth-and-family/#commentsFri, 14 Nov 2014 07:48:53 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1605078Adi Tatarko, CEO and co-founder of Houzz, visited Berlin for the launch of the renovating platform Houzz. She shared some insights on what it’s like to see a business expanding fast and working full-time while raising three children. Houzz, a leading platform for building, renovating, and interior design, started as a pet project by Adi […]
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Adi Tatarko, CEO and co-founder of Houzz, visited Berlin for the launch of the renovating platform Houzz. She shared some insights on what it’s like to see a business expanding fast and working full-time while raising three children.

Houzz, a leading platform for building, renovating, and interior design, started as a pet project by Adi Tatarko and her husband Alon Cohen in 2010 in San Francisco. Four years and $213.6 million in funding rounds later, Houzz now employs 350 people. Offices are located in the U.K., Germany and Australia. More offices in Europe and Asia are planned for 2015.

Meeting Adi Tatarko

It was the last meeting of the day. After many other interviews and in-between a few moments with her son who turned one that day, CEO and co-founder Adi Tatarko (41) sat down with VentureVillage to discuss the launch of Houzz in Germany.

Though it was already past 6 p.m., she doesn’t seem exhausted or annoyed. Her team prepared the launch party in Berlin’s Gorki Apartments. They brought items from the platform into the rooms. Besides the information and price tags, the features were also put in the rooms such as stickers (e.g. “add photo”) that truly give the feeling of walking through the app.

When she and her husband started Houzz four years ago, she was already a mother of two. Last year this time, son number three arrived. Running a company and raising three kids is a challenge but it’s doable she explained, smiling. Different to some mid-twenty founders, she appears to know where she stands.

Having started Houzz while renovating themselves and working full-time at an investment firm, she said she never expected the company to take off this way. Seeing that it does excites her even more.

Nevertheless, founders know the difference between a company with 10, 25, 100 or 300 people. Keeping a culture of trust and open communication is important to keep it a family (-like) business.

Tatarko says that employees are key for that. 50 percent of her time, she states, is used for hiring. She and her husband interviewed each and every one of the 350 employees themselves and flew some people to San Francisco to meet them in person.

There are good days and bad days, she honestly says. But seeing the impact Houzz has on people’s life is rewarding.

And so is her life, it seems. “Yes, it’s a crazy life,” she says. Seeing how important it is to be with her youngest one on his birthday, it’s obvious that she is CEO and mother at heart. “It’s about prioritising,” she adds. “Once that is clear, things work.”

Houzz as a platform

Houzz states it has over 25 million monthly users, over 500,000 signed up experts and over 4 million high resolution photographs on its platform.

The platform works in five layers. Besides inspiration, as you would find on Pinterest, Houzz also focuses on content that is created by professionals and editors. Besides that, the community plays an important role, because it connects the home owners and the professionals. This benefits both parties: Homeowners can get advice, while professionals, such as lightning consultants, landscapers or architects, can build their own reputation and brand. Homeowners can hire through the website and, since October, customers can also purchase products through Houzz.

What looks like a beautiful furniture website is a actually a huge data machine. “With all the photographs being uploaded every day, Houzz sees actual trends instead of guessing what the color of the season could be,” Tatarko explains.

Monetizing beautiful places and ideas

While you could imagine that a shop commission is the best way to monetize such a business, that was the last of three options Houzz picked.

“We didn’t focus on monetizing but on the community, when we first started,” Tatarko explains. Investors, however, saw the idea taking off early. Houzz has received $165 million Series D funding announced in October 2014 that brought the overall funding to $213.6 million.

There are two other ways Houzz gives extra features for those wanting more than the free tools. On the one hand, large brands can book an ad service. Professionals can also book to appear on a local marketplace to get into the focus of homeowners faster.

Entering the German Market

Houzz opened its office in Berlin in January 2014. The company played it smart by keeping it quiet in Europe until the content and community teams were set up. The 15 employees in Germany are working with the local community and creating content that suits the local market. Having launched Houzz Beta this week, users find a great number of products that fit the European style. This is not only for Germans, however. The styles of smaller apartments is also interesting to U.S. customers, Houzz states.

Germany often provides an attractive market for U.S. startups. Handwerk Magazin found out that the remodeling market in Germany is worth over €35 million. Fab also had just recently started here in Berlin.

Talking to Adi Tatarko, she explained another reason of why the company entered the German market. It is because users actually demanded it. 35 percent of the traffic already came from outside the U.S. Germany is the third international website Houzz launched.

]]>0Houzz’s CEO talks about the company’s expansion in Germany, growth, and familyWith new funding, Face++ focuses on commercial applications for its facial recognition techhttp://venturebeat.com/2014/11/13/with-new-funding-face-focuses-on-commercial-applications-for-its-facial-recognition-tech/
http://venturebeat.com/2014/11/13/with-new-funding-face-focuses-on-commercial-applications-for-its-facial-recognition-tech/#commentsFri, 14 Nov 2014 05:05:44 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1604478Face++, a face recognition technology provider, announced that it netted $22 million of Series B funding at a valuation of over $100 million from a consortium led by Qiming Ventures and Series A investor Innovation Works. The angel round was raised from Legend Star, the incubation program under Lenovo. Formed in 2012 by three Tsinghua University […]
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Formed in 2012 by three Tsinghua University alumni, Face++ is a cloud-based face recognition technology company that helps developers/companies embed advanced face detection, analysis, recognition, and large-scale search techs in their apps and websites. It provides a face-related API, an offline SDK as well as customized cloud services to both developers and enterprises.

The Beijing-based startup plans to accelerate the commercial application of its face recognition technology with the new funding, mainly from two perspectives.

1) Application in Financial Services: Financial institutions that integrate facial biometric data into their systems can improve the financial security of their users when they access their private accounts. The startup has entered into a partnership with Ant Financial, Alibaba’s finance arm which runs Alipay, and several commercial banks.

2) Camera data + IFTTT model: Combining camera data with the flexible IFTTT service will allow customers to trigger a pre-defined function while the cameras captured the facial information of a certain client. For example, if a camera in a boutique recognized the facial information of VIP clients, then a sales manager can offer customize services to them so as to optimize user experience.

The company claims to have been integrated into more than 14,000 apps, covering over 40 million mobile devices per month. Its partners include Alibaba, Qihoo360, Weibo, Momo, Meitu, Camera360, Jiayuan, etc.